Politics

Right On: What’s Next For Pension Reform?

The suspension of California Pension Reform’s initiative effort marks a major setback in the reform movement (full disclosure: I worked on that effort). With that campaign on ice until 2014 the question is what happens next.

I believe Governor Brown and perhaps even some Legislative Democrats are sincere in their interest in fixing the problem. They understand the math: While they are voting to cut programs they were sent to Sacramento to support (higher ed, parks, social services, you name it) the state is increasing spending on pension costs. Those are not the spending priorities their constituents elected them to defend.

The impediment to reform is the influence of public employee union bosses on these Legislators and frankly, you can’t blame them. Public employee unions have no motivation to fix pensions. Their members are getting gold-plated benefits unheard of in the private sector. Unions exist to get the best deal possible for their members, not to solve the state’s problems. What’s their motivation to support reform?

Nothing, really, except for the political math of 2012: With multiple tax hike measures, a spending limit, and a measure to outlaw automatic pay deductions from union and corporate worker paychecks poised to be on the ballot, Democrats and their union benefactors need to prove to the voters that, as the party in power, they are responsible stewards of the taxpayers’ money.

That’s why I believe there will be a cursory effort to reform pensions just enough so Democrats can say they fixed the problem but not so much that it actually does anything. The question then will be whether or not Governor Brown, who seems to genuinely understand the problem, will support this or push them to go further as he has proposed.

When you cut through the heated rhetoric on this issue there is no denying the facts in what the Governor rightly describes as a “Ponzi scheme.” We are over-promising and under-funding our commitments to our public employees. Virtually every program is getting gutted while pension costs soar.

Here’s hoping the Governor has more success than we did in taking on the status quo. The future of the state depends on it.